The Board of Directors of Streamlined Airlines Has Declared a Dividend

question 18

Multiple Choice

The board of directors of Streamlined Airlines has declared a dividend of $4,300,000. The company has 400,000 shares of preferred stock that pay $0.70 per share and 2,750,000 shares of common stock. After finding the amount of dividends due the preferred shareholders, calculate the dividend per share of common stock. (Round your answer to the nearest cent if necessary)

• A) $11.50
• B) $1.46
• C) $1.92
• D) $1.79

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Definitions:

Overapplied

A situation where the allocated manufacturing overhead cost exceeds the actual manufacturing overhead costs incurred, resulting in an apparent surplus.

Underapplied

A situation where the allocated manufacturing overhead is less than the actual overhead incurred.

Predetermined Overhead Rate

An estimated charge per unit of activity used to allocate manufacturing overhead costs to products, calculated before the accounting period begins based on expected costs and activity levels.

Total Costs Added

The total amount of direct materials, direct labor, and overhead costs incurred during a specific period for the goods produced.